I Got 90k Stolen From Me
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- Early Success, Devastating Setback
- $90,000 Lost in the Chaos
- The Turning Point: Honesty and a New Strategy
- Success Through Honesty
- Lessons Learned in the Trenches
- Scale with Luminous
The year was 2020. Fresh off a successful stint scaling a sourcing and distribution division, Jared Ward, Founder and CEO of Luminous, had just launched his own company. The pandemic hit, and like many in the import-export business, he pivoted to distributing PPE. This is his Crisis to Comeback story.
Early Success, Devastating Setback
Our initial move was promising. We secured a $300,000 PO for nitrile gloves, a product in insanely high demand during that period. Confidently, we placed the standard 30% deposit with a familiar supplier. Then, radio silence.
$90,000 Lost in the Chaos
Our $90,000 deposit vanished. The pandemic had created a breeding ground for bad actors. Factories were prioritizing higher bids, leaving legitimate orders like ours unfulfilled. Many businesses, faced with this scenario, either folded or dug themselves deeper into a financial hole.
The Turning Point: Honesty and a New Strategy
We refused to give up. Instead, we devised a new, transparent approach:
- US-Based Inventory Only: We pivoted to buying gloves that were already in the US, prioritizing tangible inventory we could see and guarantee. While prices were higher, so was the trust factor.
- Empathy and Education: Our sales strategy focused on understanding hospitals' needs and the challenges of the market. We offered authentic PPE, already stocked in the US, at a fair markup.
- Transparency Over Hype: We rejected the industry practice of promising "direct access" to production lines, a tactic often used to secure deposits.
Success Through Honesty
This shift paid off. We built trust with hospitals, secured better payment terms, and fulfilled over $3 million in POs within six months.
Lessons Learned in the Trenches
The pandemic offered valuable lessons:
- Don't Panic, Strategize: In moments of crisis, take a breath and focus on crafting solutions. Frantic reactions often lead to bad decisions.
- Honesty is the Best Policy: Building trust through transparency fosters long-term success. Avoid the hype and focus on genuine value.
By staying honest, solution-oriented, and adaptable to a challenging market, we not only recovered from a major setback but also thrived. These are valuable lessons for any entrepreneur navigating an uncertain business landscape.
Want to learn more about overcoming crisis situations and building trust with your partners? Watch Jared Ward's full video on YouTube for insights on navigating challenging markets and discover strategies to ensure a successful comeback!
Scale with Luminous
Jared's story highlights the critical role of strong operations and a transparent supply chain in e-commerce success. Luminous empowers you to:
- Streamline operations: Reduce friction and ensure smooth order fulfillment.
- Optimize inventory: Maintain clear visibility and avoid stockouts during peak seasons.
- Enhance supply chain transparency: Build trust with partners and ensure reliable order fulfillment.
Scale your e-commerce business with confidence. Book a demo with Luminous and see how we can help you navigate challenges and achieve peak season success.
Video transcript
Starting a business at the start of the pandemic
Let's rewind. It's the middle of the pandemic, I'm 27 years old, and I've just started my sourcing and distribution company. I had just scaled my division at Made-in-China.com from $0 to $10 million, and now I wanted to try it for myself. Literally right when we started the business, the pandemic happened, and we were like, well, this changes things.
So we did what a lot of people in the import-export business did at the time: we switched to distributing PPE. We found success right off the bat and secured a $300,000 PO. We were pumped. I already had a supply chain contract signed to secure the goods, get them imported and fulfill the PO.
The $90,000 deposit
So we did what I had done dozens and dozens of times before: we put down a 30% deposit with a supplier I knew and had done business with before. And then, crickets.
What happened? We had just put down $90,000 on a deposit for nitrile glove production in Vietnam at the beginning of the pandemic. If you were close to the supply chain at that time, specifically ASTM-certified nitrile gloves, you know the market went insane. There was a time when ASTM-certified nitrile gloves and NIOSH-certified N95s were like gold. It created insane scarcity, and a lot of people got money stolen from them during that time.
So I'm sitting here with two kids, a mortgage and responsibilities, and I'm immediately $90,000 in the hole at the start of my new business.
Two ways companies responded
If you got money stolen from you during this frenzy, I saw companies do one of two things. Number one, they just laid down and quit, declared bankruptcy and never fulfilled the POs. Number two, they got deeper in debt and deeper into the frenzy, and it destroyed their lives and their businesses for two years, never really delivering on any of the POs.
We didn't do either of those things. Instead, we were able to pay back the $90,000, scale to $3 million in six months and deliver every single one of our POs, all by pivoting our business model and changing the way we sold.
How the supply chain broke down
At the time, people were trying to sell massive hospitals on direct access to production lines in China, Vietnam, Malaysia and so on. There was a massive increase in demand overnight at all these nitrile glove factories around the world. Most of the factories would just keep accepting new deposits, and they'd keep reprioritizing the people who paid a higher price.
So at the bottom of the supply chain, hospitals that chose the lowest bids from middlemen claiming direct access to factory production lines were left wondering why the goods kept being delayed over and over again. If you put down a deposit with a factory, you'd keep hearing the same message: the goods are finished, or they're at my freight forwarder's warehouse. Sometimes you'd even get videos claiming to be your goods, saying they're ready, they're right here. And every time, you were bamboozled, and they'd sell the goods out from under you at a higher price.
The pivot: US-based inventory only
So instead of giving up or getting caught up in the frenzy, we switched our model to US-based purchasing only. We would only pitch gloves to hospitals if we could touch them, feel them and actually guarantee the authenticity of the goods. Gloves in the US at that time were double the price of gloves coming straight off the production line in these factories.
We had quick, concise outbound and good, educational outbound scripts. When we got people on the phone, we were very empathetic to their pain points but firm on why we thought our path to acquiring PPE was the best and most effective.
We were able to sell US inventory at a slight markup and guarantee authenticity and delivery. We sold into billion-dollar hospitals and fulfilled over $3 million of POs within six months.
Lesson one: don't act out of anxiety
Here are two lessons I learned during this time. Number one: don't act out of anxiety. The anxiety will come. Feel it, process it, but take a step back and come up with a solution from clarity.
I saw so many people get caught up in this frenzy: I'm going to sue Vietnam, I'm going to get a friend to go over there, I'm going to do this or that. I was just like, I can't control any of this, so I'm not going to try.
Lesson two: be honest
The second lesson was very simple: just be honest. Speak from your experience. We didn't stay in the lying frenzy that was selling access to production that would never happen and that we couldn't guarantee. We just told people exactly what we were experiencing. We weren't price gouging, and we could guarantee everything we were selling.
So not only did we outperform our competitors, but we also got better payment terms. In the end, honesty pays. At the end of the day, we paid back the full $90,000, delivered real gloves to hospitals in need, and navigated a crazy time. Thanks, guys. Peace.